INSIGHTS & EVENTS

How is the network era affecting large organisations?

How is the network era affecting large organisations?

Slavery was a terrible thing, but for thousands of years it remained a convenient way to get work done. Mass slavery persisted until enough people decided that dominance through fear was no longer an ethical means of organising people.

The widespread abolition of slavery heralded a paradigm shift in consciousness. The advent of the industrial revolution brought with it the emergence of the first large organisations. Command and control became the best way to coordinate the masses, and the profit motive became the new organising principle.

As large organisations became more complex, often through mergers and acquisitions, a more subtle variant of the command and control approach emerged - that of ‘conformism’. Groups and departments within the same organisation often adopted an ‘us versus them’ mindset as they sought to defend their perceived territory from the new arrivals. The resulting blame culture that emerged gave rise to a silo mentality, and inter-departmental politics became the control mechanism.

So what’s next?

We are now thirty years into the digital era, and fifteen years into an age of hyperconnectivity. Digital technologies are fundamentally changing the ways in which we work, think and socialise, with ‘search’ and ‘share’ becoming central to the human experience. Mass connectivity has brought with it mass transparency, shining a spotlight onto the internal workings of large organisations.

While this has liberated the individual, it has caused terror for many businesses and governments as they are no longer able to hide behind traditional marketing and communication strategies. Not only are the masses getting much better at reading the intent behind the message, they are increasingly able to broadcast their own in order to challenge previously unchallengeable power structures.

We are seeing the emergence of a new organising principle: the network. But what does this mean for large organisations?

Reputation is now becoming as valuable as the profit motive. According to Thomson Reuters and Interbrand, 75% of the value of today’s average corporation is intangible. And in a survey by the World Economic Forum, three fifths of CEOs felt that brand and reputation were responsible for more than 40% of their company’s market capitalisation.

The power of collective opinion can increasingly determine the fate of any organisation. Whereas ‘old power’ models were based on the ability of a person or an organisation to control information and people, ‘new power’ models are grounded in sharing, co-creation and the potential of the crowd.

People – both inside and outside the company – matter more than ever before. As the global population becomes increasingly connected through social media, people are rapidly changing their expectations of large organisations. From customer experience to recruitment to marketing, digital and social are forcing transparency and accountability on an unprecedented scale.

There is significant opportunity for an organisation to innovate by empower its workforce through networking and socialisation. And the potential to innovate is no longer confined to employees: digital and social now make open innovation - crowdsourcing ideas from outside the organisation – both possible and profitable.

But navigating these opportunities and challenges requires a new mindset, one that acknowledges the limitations of command and control, rejects the fear of socialisation and embraces the power of the network. If you can no longer tell people what to do – even if they work for you – then you need a new approach to leadership. If you want to inspire loyalty, trust and engagement, you need to create the conditions in which people can and want to relate to the values of your organisation. And if you want to reduce complexity, you need to appreciate that a socially empowered workforce capable of asking and answering informed questions can be a powerful partner.

Inevitably this new era will challenge organisations to produce, store and share intelligence in ways that were unimaginable only a few years ago.

But, like it or not, the future is network empowered socialisation.

Source: The QoE April 2015, Carl Lyon Written: Tony Reeves, University for the Creative Arts